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Thursday, August 03, 2006

An Estate Tax Twist Reverses Party Roles On Minimum Wage

For years, organized labor has worked hard to raise the minimum wage, while business groups have campaigned to block such a change. This week in the Senate, however, the AFL-CIO is pushing to kill the wage increase while practically the entire business lobby is demanding that it pass.

The reversal is the product of election-year politics and clever -- critics say devious -- legislative packaging that has been dubbed the "trifecta." In the same bill, senators are being asked to raise the minimum wage (the liberals' goal), cut the estate tax (the conservatives' objective) and approve a laundry list of popular, though narrowly targeted, tax breaks....Prodded by moderate Republicans eager to undercut criticism by Democrats that GOP economic programs overwhelmingly favor the rich, the House approved the package last week, including a three-year phased-in boost in the nation's minimum allowable hourly wage to $7.25 from the current $5.15. It would be the first increase in the minimum wage in nine years.

Interesting, but how is this playing in the circles of labor and business...

Labor officials say that their opposition is a matter of economic and social justice. They also say that reduced revenue from estate tax relief could lead to cuts in federal programs for the poor, such as food stamps.

"We don't think minimum-wage workers should have to wait for millionaires to get another tax cut before they receive a long-overdue pay increase," said Bill Samuel, the AFL-CIO's legislative director.

In contrast, business lobbyists are seeking "yes" votes. Dan Danner, executive vice president of the National Federation of Independent Business, the small-business lobby, sent lawmakers a letter of support this week.

"While we have strong concerns about the minimum wage hike, we're supportive of permanent relief of the estate tax," he wrote. "If Congress needs to address the federal minimum wage level this year, we believe it should be addressed in a package that also provides significant relief for small businesses. . . . The bill does just that."

Also take a look at this...

"Every closely held business in America today is either affected by the death tax or could be affected by it," one top business lobbyist said. "At the same time, less than 3 percent of the country's workers get paid at the minimum wage." In addition, the lobbyist said, "people in the business community understand that it is valuable to Republicans standing for election in November to demonstrate that they have compassion for folks at the lowest end of the economic ladder."

This was worth posting especially in light of the big box ordinance. Something to consider.